If Democratic Socialists get their way, they will take the labor out of Labor Day and replace it with a guaranteed government check. Politicians, tech entrepreneurs, and policy advocates seem to be championing the concept of Universal Basic Income (UBI). UBI sounds attractive: a guaranteed government payout to every individual, without strings attached. A utopian vision of a basic stipend that allows you to live better or ease financial struggles. OpenAI founder Sam Altman did a three-year UBI study where 3,000 people who lived below the poverty line received varying stipends. At its conclusion, “the study found that recipients of the bigger checks had more flexibility to look for jobs that they actually wanted.” Global UBI trials in Stockton, Finland, and Kenya showed the participants had “improved mental health, better employment outcomes... and no meaningful reduction in work effort.”
To collectivist visionaries, it symbolizes that society can finally work as it should and income inequality can be addressed.
But none of these studies have been conducted across a large control group or delved seriously into the long-term deficits of such a program.
At its heart, UBI is anti-capitalist and anti-human actualization. Income equity may be its stated aim, but what would result is a permanent underclass of dependent victims, rather than productive citizens. UBI removes the essential building blocks that create wealth and strong societies. Once this is stripped away, society, along with the men and women who build and maintain it, will be lost.
Instead of eliminating inequality, writer and media theorist Douglas Rushkoff surmises that UBI would create greater inequality and cement an underclass of takers. In one video, Rushkoff said that UBI is “a way of perpetuating our role as consumers at the bottom of the pyramid, not our role as owners.” Rushkoff asserts that this type of system “allows the people who own the lion's share of our world to own more and more of it.”
When workers have access to the ladder and have an ownership stake in the means of production, then they are invested in its success or failure, and actively work to see the former accomplished. Success comes in many forms and has no caps or limits. The same cannot be said of UBI: a basic income does not necessarily translate into a lucrative one.
Think about the employee-owned and operated Publix grocery store chain, or the SpaceX public IPO, which allowed thousands of employees who invested their sweat and tears into the company to now be millionaires. UBI removes this form of “skin in the game,” disincentivizing the pursuit and the importance of the work being done.
Here are essential aspects of pursuing work which UBI would eradicate:
A sense of purpose
Contribution to a greater goal
Opportunities for challenge and change.
The desire to achieve, knowing one is a necessary part of something greater than oneself, and being driven by challenge and change builds mental, physical, and emotional muscles that could not be possessed otherwise. Thomas Edison said this of opportunity: “We often miss opportunity because it's dressed in overalls and looks like work.” Certain insights and skill sets can only be achieved through work, and only assist in the next phase of one’s future work and life, helping to forge deeper purpose.
Sadly, this is absent with some in the younger generations, which is reflected in the current labor participation rate at 61.4 percent, the lowest since February 2021. This could be part of the reason why the siren song of socialism and UBI is so compelling.
Spearhead Advisors co-founder Nicholas Pardini pointed out this perhaps unintended consequence of UBI: when meaning and purpose are removed, classism and societal ills replace them. The adage, “An idle mind is the devil’s workshop,” takes on new meaning when men and women do not have work, achievement, and goal accomplishment to occupy them. Pardini makes the salient point that idleness is “a clear sign of social decay,” which could lead to economic envy and social unrest.
Pardini considers UBI “incompatible with a modern economy.” With this increase in takers and reduction in makers, those who can be taxed will be taxed even more. During the pandemic, many were forced out of work while given a government stipend, and unemployment insurance payments were increased. What resulted from these actions was rampant fraud and a disaffected working class. Not to mention, the cost of goods and services ballooned. This would be the long-term deficit of UBI, as the cost of living maintenance would outpace any benefit from a stipend.
The touted promise of UBI may seem attractive, but all that glitters is not gold.
Jennifer Oliver O’Connell is a visiting fellow with the Independent Women’s Center for Economic Opportunity.
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